| | | I agree. You have two main decisions; (1) your Buy point and (2) your Sell point. I do own a handful of stocks that I have owned over 20 years but my CAGR on those are still less than that of the $SPX.
Examples of two of my holdings:
(NOTE; CAGR includes dividends)
(1) Chevron Corp (CVX) 4% avg div/year; bought in 2003 at $32; 2025 price $157; 22 year annual CAGR = 10.27%
$SPX CAGR over 22 years = 13.6%
(2) Sempra (SRE) 3% avg div/year; bought in 1998 at $14/share; 2025 price $88; 27 years CAGR = 7.18%
$SPX CAGR over 27 years = 8.38%
$SPX CAGR over 20 years vs 68 years
- Result 5 shows a 30-year average return of 10.985% and a 20-year average return of 10.475% (both including dividends).
- Result 7 mentions that the S&P 500 has delivered an average annual return of 10.13% since 1957.
I look at 18 month to 24 month holding periods w/ the expectation of 15% CAGR or more (I have had 30% CAGR). The key is buying at/below the SMA(200) weekly and then selling (or scaling out) if/when that CAGR grows less than the $SPX and/or company specific issues, limited growth and/or slower FCF begins to show up.
Looks like KO CAGR is higher than the $SPX perhaps as high as $11.5%.
To estimate the CAGR for Coca-Cola (KO) over the last 30 years including dividends, we'll use the available data and make some reasonable assumptions:
- Price appreciation:
From the 30-year financial data provided, we can see that the 10-year price total return CAGR is 8.80% 1.
- Dividend growth:
- The 10-year dividend CAGR is 4.30% 1.
- The 5-year dividend CAGR is 4.00% 1.
- The 3-year average dividend growth rate is 4.91% 5.
- Current dividend yield:
As of February 22, 2025, the forward dividend yield for KO is 2.72% 2.
Given that we don't have the exact 30-year data, we can estimate the CAGR by combining the price appreciation and dividend information:
Estimated 30-year CAGR = Price appreciation CAGR + Average dividend yield
˜ 8.80% + 2.72% = 11.52%
This estimate assumes that the 10-year price total return CAGR is representative of the longer 30-year period and that the current dividend yield is a reasonable approximation of the average yield over time.
It's worth noting that this is a simplified estimate. The actual 30-year CAGR including dividends could be slightly different due to factors such as:
- Variations in dividend growth rates over time
- Compounding effects of reinvested dividends
- Changes in the company's performance and market conditions over the three decades
However, this estimate of 11.52% CAGR over 30 years, including dividends, provides a reasonable approximation based on the available data.
I would say, Buy/Hold a mutual dividend growth Fund and/or $SPX AND selectively Buy/Sell 18-24 months holds making your Buy point at/below it's SMA (200) and selling if/when the CAGR begins to fall and/or company specific issues develop.
It's hard to beat the annual CAGR of the $SPX which has averaged 10% over the last 25 years.
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FWIW; two new Buys have come up that meet these constraints: (1) Merck & Company (MRK) & (2) Applied Materials (AMAT).
I like to average into these to build a core long term holding (and/or add to lower price shares) w/; larger buys as stock sells off below the SMA(200) weekly. |
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